Thursday, August 09, 2018

IPSC session 2


Session 2: IP History and Theory,

Stephanie Bair, IP Inequality
Artists and innovators are not equally distributed. Rich people are more likely to acquire IP rights than poor people; whites than minorities in the US; males than females.  Theoretical lens: income inequality. Children from high-income families are 10x more likely to apply for a patent than children from low income families, even controlling for educational achievement. Only 18% of inventors were women. Brauneis/Oliar on ©.  Income inequality has similar race/gender aspects, and both IP and income inequality contribute to concentration of wealth in the hands of a few. Some people think income inequality is good b/c it encourages risk-taking.  Is the same true of IP inequality?  No, it doesn’t hold water b/c IP is already structured as an optional incentive system. If you want financial and status benefits, you can create something; what’s not required to serve this incentive function is relativity or inequality in the system itself—having more IP than others is not what’s driving the system.

IP isn’t a perfect proxy for innovation, so there could be IP-related reasons for disproportionate participation in the formal IP system. Financial, cultural, value-based reasons. Or they could be disproportionately innovating in areas of IP that aren’t protectable, like social innovation. They could be denied IP rights at higher rates due to explicit/implicit bias, and there’s some empirical evidence of this in patent. Stereotypical male conception of innovation.  There is also a true innovation gap—people from certain groups are innovating at suboptimal levels.

Role of exposure to other inventors/innovators—exposure to such a mentor increases likelihood that person from underrepresented group becomes an inventor.

Psychology literature: Circumstances of poverty bias decisionmaking away from types of thought processes that lead to creative breakthroughs.  Effects of past chronic stress on explorative v. exploitative thinking—when people experience the world as harsh and unfair, people stick to what they know rather than exploring new options. Problematic from creativity perspective. Also, dichotomy b/t habit based and goal based decisionmaking. Chronic sleep deprivation, linked to poverty and racial subordination, contributes to habit based decisionmaking, which also hinders creativity. Even if IP system is fair and open, hard to respond to its incentives.

[Woolf’s A Room of Her Own.  Time and leisure and space, mental and otherwise, are in short supply when people are overburdened with care work/survival work.]

Jeremy Sheff: Effects of poverty on lived experience of individual poor people: if I don’t make a living, I won’t eat and my kids won’t eat.  Don’t need psychology to explain the absence of the capital/time required for innovation.

A: this is additional to the explanations like that one.  Chetty study specifically found financial barriers to entry weren’t as important as one might have hypothesized in that if those barriers were absent but there wasn’t a mentor, it didn’t matter as much.  [People from poorer backgrounds who can make high incomes often feel pressure to do so to support others/justify the sacrifices made to get them there; perhaps a mentor can direct that in the direction of innovation.]

Sean Pager: note that new innovation/creation from underrepresented groups may fill gaps that need filling, rather than more of the same.  Role of incubators set up by interest groups etc.?

Copyright, Andrew Gilden, Copyright’s Market Gibberish

Cases like Nunez and Bond v. Blum reject privacy as something w/in scope of market analysis. Other cases where Ps resist sale for any reason, like Salinger, reason that though Ps don’t want to sell these rights now, they might in the future, so there’s market harm; or they’ve sold similar photos/rights in the past and so have market-based rights now. Cases about political opponents: P isn’t allowed to say there’s market for headshots used by opponent, but Don Henley is allowed to presume a market for political licensing of his songs. Weirdly large body of caselaw about religious disputes: Lerma/Scientology.  Worldwide Church of God: P able to stop splinter group from using founder’s highly racist views—no financial interest in the work or interest in selling it, but court hypothesizes there’s still economic value to defeat fair use.

Does not want to require actual/foreseeable harm to P’s market interests. Not possible to rigorously separate market and emotional reasons. There are distributive problems w/ economic only view—advantages those with track record of success in the market, like Salinger. [Though that doesn’t have to be the case if you use traditional, reasonable or likely to be developed as a standard.] Slicing apart economics and emotions have a disproportionate impact on women, minorities, and the poor, whose injuries are less likely to be valued highly (or at all) in monetary terms.  “Coddling artistic vanity” is a gendered concept w/no place in the © system. Author’s right to change “his” mind and eventually sell a sex tape; courts use “his” and not “her” in this framing.  Courts should instead openly and explicitly discuss the interests that they are actually weighing.  Basis in the statutory text: effect on the potential market for, or value of, the copyrighted work, stated in the disjunctive.  Video Pipeline: © isn’t just about monetary compensation.  We have developed a good taxonomy of defendants who should be allowed to copy and not a good taxonomy of plaintiffs who should be able to assert nonmonetary interests.

Likely pushback: expand © in problematic ways.  He thinks it will help reign in abuses and censorship. We can distinguish between privacy and autonomy and online business reviews or efforts to suppress political opponents.  In cases where courts do openly discuss privacy/religious interests, they do so to deny claims, so expansion of © comes from opacity.  If courts can be open and explicit about noneconomic interests, so can parties, which means that remedies can be tailored to those interests.

Annemarie Bridy: Longstand policy choice not to have moral rights in ©.  Your argument seems to be that courts are backdooring this through market harm, so let’s just embrace it. Normatively I would be inclined to hold the line and criticize the cases. © is looking for public benefits and that generally happens through markets/dissemination, so we should keep that.

A: don’t take a strong stance on what the balance should be, saying that the cases are wrongly framed as market interests v free speech rather than surfacing the conflict. [Shouldn’t the criticism then be that the cases making up fake market interests shouldn’t do that?] He doesn’t think there should be a cause of action for mutilation/distortion, but actual copying cases should consider the motivation behind the invocation of ©. There’s no way to distinguish economic/emotional motivations.

Bridy: but isn’t that what the fair use factors are for, testing for the right motivation in asserting a 106 claim?  If you aren’t experiencing harm under 107, you shouldn’t win.

A: but you can’t actually police that because of the market language that non-market Ps are able to use.  We can’t draw those lines.

Q: Why not tell these Ps that they should bring privacy claims if they have privacy interests, not © claims?

A: then we have to ask why they don’t—it’s b/c of weaknesses in those cases. [But why does that mean it should matter to the fair use analysis?]  Selective access to privacy protection through © is the worst of all worlds.

[Yeah, I have the likely pushback. Allowing “value” to mean “nonmonetary value” creates what I call the “Centerfold” problem: I may feel bad that you made a critical, fair use, and the work may now feel contaminated to me, but I don’t believe that the law should weigh that against fair use.]

Dustin Marlan, Unmasking the Right of Publicity
Protecting the internal dimensions of the person is generally considered the role of privacy, not publicity rights. Jerome Frank’s conception was very influential.  Now a hydra-like right, merchandising, endorsement, and “impressment.” Similar to intrusion upon seclusion, false light, etc. in terms of privacy categorization, but what caused this bifurcation between economic interests and personhood/privacy interests? What is the persona—“mask”—for publicity rights? Might be based on Franks’ own conception of a self split into the private true self and the public false self which is constructed and commodified.  Haelan was the first recognition legally of the persona as an assignable, alienable right independent of the right of privacy.  Frank had been psychoanalyzed and recommended it to his colleagues; wrote about psychological concepts of the law in which judges were father-substitutes making the pretense that law was clear and precise.  He was a fact-skeptic, believing that uncertainty in judicial process resulted not just from uncertainty in law but uncertainty in judge’s perception of facts—law varies w/judge’s personality.

Consider other concepts of the self that better integrate privacy and publicity: Julie Cohen’s postliberal approach to the problem of selfhood is relevant to both: subjectivity emerges gradually, shaped but not determined by surroundings, situated within relationships, practices and beliefs. Celebrity as a mask that eats into the face (hey, I wrote a thing about that)—may be impossible to distinguish them in the way the law now presumes.

Shyam Balganesh: wonders whether other stuff in Frank’s life was more important than his earlier book—Frank himself was very clear about his academic persona versus his judicial persona.

Copyright, Christopher Yoo, Are Ideas Independent from Expression: Implications of Linguistics and Cognitive Science for Copyright

Sapir-Whorf: language structures our worlds, determines our actions, constrains our thoughts. Steven Pinker believes that we think in mentalese: we have a concept of blue that is independent of the word for blue.  Even though Korean treats blue and green the same, Pinker thinks there’s something innate, as does Noam Chomsky who posits a universal grammar and that language/acquisition can be studied out of context.  “Colorless green ideas sleep furiously” is grammatically correct even though it is meaningless—there’s an inherent structure.  Another version of language is agglutinative, with verb at end and particles changing the meaning, like Finnish, Hungarian, Korean, Japanese—another major form that just happens to manifest in different parts of the world b/c there are a limited number of ways to structure language.  Now: renaissance of interest in Sapir-Whorf—studies of directional languages/thinking.  Huge controversy about which way causality runs.  Inuits have multiple words for snow, but the number is in dispute and they need them. 

Implications for ©: Paramount v. Axanar—unauthorized Star Trek prequel; Paramount asserts © in Klingon as a language.  Natural languages aren’t copyrightable, but what about constructed languages that originated from a creative work but are now spoken by people? Axanar case says it’s a jury question. Sapir says language is an agreement b/t people to communicate on certain terms. Doesn’t have to be formal agreement, but genericide is an example: by practice we use thermos to mean a thing.  Tolkien’s estate asserts © in Elvish but doesn’t assert rights in noncommercial uses.  See also Esperanto, Loglan, Na’avi, Dothraki.  Loglan is a constructed language to test the Sapir-Whorf hypothesis, to see if they thought differently when using it; creator asserted © to stop others from using, which seems self-contradictory.

Wikipedia and Aboriginal languages: Tasmanian palawa kani is an attempt to synthesize fragments of 12 extinct indiginous languages and promote its use. Wants to set rules on who can use it, claiming under UN Declaration of Human Rights of Indigenous Peoples, not copyright. Raises how shared language can define a community. Wikipedia rejected request for removal.

Oracle v. Google: can’t © overall computer language, but a specific computer program can be. Where is API in that scheme?  Fed. Cir. reversed two jury verdicts saying it was ok. This is about levels of generality/taxonomies.  Reminiscent of Nichols v. Universal Pictures; EU came out the other way.

Other implications: right to speak a particular language; importance of gendered speech.

Pam Samuelson: how would you rule on computer languages developed in order to become “lingua” of that community versus things that are more artistic such as Klingon? What tool do you use? She thinks of language as system with structure & component elements.

A: the way statute is drafted excludes all that. We have a generality problem. He would draw the line at functionality. Similar to transformative use—now w/database cases it’s about making creative works more useful rather than more/differently creative.  Tolkien’s Elvish: Kind of like laches—once you let it loose in the world, other people should be able to use.

Justin Hughes: Malaysian/Ba’ahasa was a pidgin/trading language for coastal peoples, built into a language—this seems like a functional purpose.

Betsy Rosenblatt: you talk about genericide; we don’t protect systems b/c we think they’re functional. To the extent that it’s a communication tool, it’s functional even if it is expressive in the origin. So wouldn’t draw a line b/t Klingon and Java b/c they are both building blocks.

A: Coders say code is beautiful but most of them don’t do that in their daily work.  Klingon was designed by linguists.

IPSC session 1


Standard disclaimers apply: These are my summaries, not the presentations themselves. As usual, I have to skip a lot of interesting presentations and I try to attend things I haven’t seen, no matter how good the ones I have already seen/read drafts of are.

Session 1: Trademarks

Jason George (and Lisa Larrimore Ouellette), Trademarks as Innovation Incentives

Not saying that the goal is/should be innovation. SCt has said multiple times that TMs aren’t about promoting innovation or discovery; that’s patent/©.  We’re saying that this has made us overlook the effects of TM on innovation, which could be good or bad.  Survey evidence: many innovative firms don’t use patents at all. Pharma/chem aside, firms view first mover advantage as more important in appropriating returns from investment.  Not concerned about lines separating doctrines. TM is important in maintaining/extending first mover advantage and thus creates incentives.  Purple pill for Nexium=competitive advantage in the marketplace; the Swiffer, which used lots of existing inventions but appropriated returns through branding.

Economists are now using TM as innovation indicator—registrations correlate w/R&D spending, stock market value, and self-reported innovation as well as patent counts. There are caveats. TM registrations don’t mean 1-1 new product; could be a product new to the firm or the marketplace rather than new to the world, but that’s also true of patentàinnovative product. Also industry-dependent, but in some industries TM better correlates w/innovation than patent, for example in info services.

This doesn’t mean that more TM means more innovation.  TMs have costs to innovation, as w/patents.  Barriers to entry; higher prices to consumers. Overincentive—TMs can endure forever.

How do first movers exploit TMs?  At least three mechanisms: staking out the most effective marks—Beebe & Fromer on the marketing literature on the limited supply of “good” marks.  Causing chosen marks to become synonymous with the innovation—arguably Lyft is a better name for ridesharing, but Uber owns the category mentally.  Using the first mover period to develop brand loyalty, as w/name brand drugs after patent expiration.  Can work together: cronut is an apt name for the hybrid pastry, and it’s a registered TM though it’s arguably generic (and the registrant may not have been the inventor [which seems to be a problem for the theory, as does the Swiffer example]) and developed brand loyalty. [Isn’t this an incentive to create a thing called brand loyalty or goodwill, not the thing that we have historically called innovation?]  Shredded Wheat case goes to the link—protecting a name synonymous w/product has a similar effect as patent protection post-patent expiration. 

Complementarity b/t patents and TM in industries w/low turnover and need for differentiation b/c advertising spills over to similar products, like the pharma industry. [Maybe you need TM differentiation to preserve market share in pharma precisely because pharma depends on patent-type innovation, which is generally free for others to copy once the patent expires?]  But TM provide distinct benefits over patents: Cost. You don’t need anything to get TM protection but bring product to market, and registration is cheaper/faster than patent examination. TM cover more subjects than patent—anything that can be sold in the market.  Quick innovation cycles are poor fits for patent as w/software, but first mover advantage can be significant. Less robust protection than patents, but weaker protection over a longer period can achieve the same incentive w/less deadweight loss.

Any full economic analysis of given TM doctrine should take good & bad into account when trying to measure its effects on a particular industry.  Where doctrines give wiggle room: genericide, secondary meaning, functionality. Unclear if change is needed. Added complexity from trying to factor in may o/w possible efficiency gain but that’s different from believing that these effects don’t exist.

[Why not call this theory a theory about protection against point of sale confusion or maybe just against counterfeiting?  Current formulation seems to be imprecise in just the way that distorts full economic analysis.  Does dilution protection support first movers’ incentives?  Especially given the evidence about how most (non-pharma) firms don’t make internal distinctions b/t IP doctrines (see also Jessica Silbey’s work), it’s hard for me to understand how one would distinguish between “existence of some basic TM right” and “this particular aspect of the doctrine” in performing the economic analysis of a doctrine’s incentive effects.]

Q: this is about what TMs do to compete/bring a product to market, not innovation. What is it about TM law that is stimulation innovative activities as opposed to bringing a product to market? Also: Don’t really get how registration is an innovation indicator. From economic perspective there’s such a low cost that it’s not a great signal. Innovation correlates w/ a lot of stuff like not being starved.

A: Rewards a number of different activities, but mechanisms affect first mover advantage in a lot of ways.  One could argue that first mover advantage is the key thing, and TM extends that.  Causes TM to have more direct effect on innovation.  Also true that correlation isn’t causation.  Don’t rely on those studies.

Christian Helmers (with Carsten Fink, Andrea Fosfuri, and Amanda Myers​), Submarine Trademarks

iPhone mark originally filed in Trinidad & Tobago on paper March 2006, by a company called Ocean Telecom that eventually merged w/Apple.  Filed USPTO by Ocean Telecom Sept. 2006 for extension from T&T.  Official announcement by Apple Jan. 2007.  Released June 2007; merger w/Ocean Telecom Sept. 2007. This reflects the submarine strategy: public disclosure is strategically delayed by filing in a foreign jurisdiction w/o online publication and sometimes combined w/use of shell companies. That can then be used to get US priority when filed w/in 6 months under the Paris Convention.

Small but increasing number of mostly tech firms. Used PTO TM dataset to ID TMs 2002-2016 claiming priority from one of 6 jurisdictions that are Paris Convention but don’t publish online register. Also extracted non-submarine filings from companies that use the submarine strategy.  187 unique company names doing submarine filings. Also distinguish filed in own name/filed by shell company; our prediction is the upward trend of filings will continue to increase.  Apple, Google, Zynga, Mattel, T-Mobile, Cisco, Amazon, LG, Bethesda Softworks, Intel, Beats Electronics, Facebook, Instagrams, Nest Labs, Tivo.  Amazon stands out w/shell company filing strategy, but Apple has done it more numerically so far.  Strong trend: class 41, 42 (computer & entertainment services), goods class 9 (computers): usually filed in products & services.  Mattel stands out here as toy company, but has used the strategy for online characters.

Used Google Trends: are submarine TMs associated w/fewer online searches prior to official product announcement/release?  Answer: yes. iPad Air, for example, had zero search intensity until official announcement; the USPTO filing date was after the official product announcement. Compared to regular TMs: the regular marks have much higher search intensity before the announcement date.

Thus submarine TMs do seem to be associated w/more secrecy than regular TMs. More likely to use when TM/product is more valuable; competition for products/names is intense; company pursues a global branding strategy. Various metrics, including: Where you tend to have a lot of refusals and oppositions, companies are more likely to go submarine.  Madrid filing/Madrid filing in China (indicating a global strategy) is positively associated w/submarines b/c they’re worried about squatting in China.

Daniel Hemel (and Lisa Larrimore Ouellette), Governing the Semantic Commons

Semantic space is elastic, but not infinitely or effortlessly so. English speaking consumers can be trained to remember marks like Krasny Oktyabr, but it’s a cognitive stretch. Example: Hagen Dasz.  Tragedy of the semantic commons include costs of proximity: costs arising b/c marks are too close semantically to one another include consumer confusion, reduced incentives to innovate/invest in quality.  Distance also leads to confusion: medication with name too long for expanded Twitter count makes it hard to identify the medication or to figure out what’s the same/different—leads to greater reliance on gatekeepers and greater start-up search costs.  Compare: last French/Italian wine you drank—what was the mark, not the varietal? For non-connoisseurs, it’s hard to remember and we become reliant on people who restrict market access.

Trouble w/TM is not just that semantic space is limited, it’s also that almost any change to TM law that reduces the costs of distance will increase the cost of proximity, and vice versa.  This tradeoff is almost inevitable. Consider geog. limits on TM protection, or higher showing of secondary meaning before recognizing a descriptive term as a mark: that increases ability to approach the other use, but also risks confusion for the people who do cross over geog. lines or who do think there’s a single source.

3 possible escapes from the dilemma: propertization. TMs are relatively weak property rights; assignment in gross doctrine limits alienability/divisibility, making semantic space heavily zoned—you can’t just do whatever you want w/your property. We could remove the zoning and allow property owners to allocate regardless of actual consumer protection, so the single owner could decide, or not, to allow one user in California and one in Iowa, or one user in one category of beer and another user in another category. Demsetzian logic: trust the mark owner.  Trouble is the Merrill/Smith argument about slicing property.  Other marks lose information value when you do this.  You can’t then look at any TM and understand what it represents, and the property owner doesn’t take that externality into account when making decisions for its own benefit.

Could use Pigouvian tax, or subsidize firms that expand the semantic commons.  Target tax benefit for advertising to those who call their product “Smirnoff” instead of “Natural Light.” 

Alternative ID systems: government generated, like SSNs, or bar codes (privately generated) so that you don’t have to remember what you drank before and can just scan the bar code.  There is need for coordination, whether by gov’t or by private systems.  Some health systems use 10-digit identifiers and others use 11-digit, and not all transfer the 10 to 11 in the same way, which is a problem of semantic space but not generally thought of as a TM problem. 

Q: is propertization sensible given the confusion results?

A: We know that land is finite and we’ve still given strong property rights.

Wednesday, August 08, 2018

The Ninth Circuit don’t care: successful Rogers defense reversed because plaintiff’s trademark is “artistic”


Gordon v. Drape Creative, Inc., No. 16-56715 (9th Cir. Jul. 30, 2018)

The Ninth Circuit routinely invents some new epicycle for trademark defenses; here it unfortunately mushes together Rogers and transformativeness (absent the word itself, replaced with “artistic”).  There are a number of good reasons why a trademark right is not the same thing as copyright in an artistic work.  [See also: there’s no copyright in short phrases, and an artistic work can’t be a trademark for itself.]  This opinion unfortunately does not appreciate those distinctions, creating a sort of tradecopymarkright, the kind of thing Dastar cautioned against.

Gordon is the creator of a popular YouTube video known for its catchphrases “Honey Badger Don’t Care” and “Honey Badger Don’t Give a S---.” He registered the former phrase as a trademark for various classes of goods, including greeting cards. Defendants made greeting cards using both phrases. The district court granted summary judgment on Gordon’s trademark claims for defendants, using Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989).  The court of appeals reversed.

The court of appeals found a triable issue of fact on artistic relevance: “Defendants have not used another’s mark in the creation of a song, photograph, video game, or television show, but have largely just pasted Gordon’s mark into their greeting cards. A jury could determine that defendants did not add any value protected by the First Amendment but merely appropriated the goodwill associated with Gordon’s mark.”  What has happened here is that the word “relevance” has been ignored, and “artistic” has been reinterpreted as a thing that the defendant must add to the original, rather than having a meaning-based relationship between the original and the accused work.  I don’t understand why “Barbie” wasn’t just “pasted” multiple times into Barbie Girl, etc.—the court has some definition of “pasting” that includes “forming a joke around” but not “forming a song around.” 

What’s really going on here is a denigration of the greeting cards as works—protected by the First Amendment, yes, but not real works like songs, photos, video games, etc.  This is not without irony given the ways these classes of works have been denigrated in the past, but it also speaks to the confidence courts have in making judgments about how much art is in a work, which they seem to think differs from judgments about merit.  And therein lies a deeper irony, which is that trademarks are one prominent example of how lots of meaning can be concentrated in small semantic/symbolic units.  Hamlet these cards ain’t, but they shouldn’t need to be, and it seems to me that, as with cockfighting in Bali, one could perform a pretty serious reading of current American culture using these greeting cards.  The court of appeals basically doesn’t think that defendants did anything more than tell the same joke that Gordon did.  Ok, but it’s still a joke that has nontrademark meaning, and preserving the freedom to engage in that kind of expression is the point of Rogers.

The court of appeals found that the defendant had met its initial burden of showing that the allegedly infringing work was part of an expressive work protected by the First Amendment [pause for the usual sigh: the court means noncommercial speech, since commercial speech is also usually expressive].  The burden shifted to the plaintiff to show not only likelihood of confusion but also at least one of Rogers’ two prongs: explicit misleadingness or lack of artistic relevance.

The greeting cards were, of course, expressive works: “Each of defendants’ cards relies on graphics and text to convey a humorous message through the juxtaposition of an event of some significance—a birthday, Halloween, an election—with the honey badger’s aggressive assertion of apathy.”  The level of necessary artistic relevance must merely be “above zero.”  If this weren’t the Ninth Circuit, it would be startling for the next sentence to be in a case that finds a triable issue of fact: “The honey-badger catchphrase is certainly relevant to defendants’ cards; the phrase is the punchline on which the cards’ humor turns.”

Unlike every Rogers inquiry up until now (including Parks), the court continues: “the ‘artistic relevance’ inquiry does not ask only whether a mark is relevant to the rest of the work; it also asks whether the mark is relevant to the defendant’s own artistry.” [Citation needed.] How do we define relevance?  “The use of a mark is artistically relevant if the defendant uses it for artistic reasons. Conversely, the use of a mark is not artistically relevant if the defendant uses it merely to appropriate the goodwill inhering in the mark or for no reason at all.” [A key problem here is that “to appropriate the goodwill” isn’t the opposite of “for artistic reasons”—what the court is really doing is importing transformativeness from the right of publicity defense to Rogers, which I can’t see as a benefit, especially given the mess it further makes of the video game cases, which I would’ve thought couldn’t get worse. Silly me.  Also, “to appropriate the goodwill” sounds worryingly intent-based, though the court isn’t clear on this, and Rogers itself was supposed to draw a line between “to invoke the cultural significance of” and “to infringe” which is now apparently infinitely regressed into the test.  Suppose the defendants credibly testify that the purpose of the use was to create a joke that felt contemporary and casual.  Is that “artistic”?]

The court continues: “[f]or artistic relevance to ‘be above zero,’ the mark must both relate to the defendant’s work and the defendant must add his own artistic expression beyond that represented by the mark.”  [Apparently original artwork and minimal jokery does not qualify as artistic expression as a matter of law; I would have thought it should.]  For example, “[n]o one seeing Warhol’s work would think he was merely trying to appropriate the goodwill inhering in Campbell’s mark; no one thought Warhol was selling soup, just art.” [And what do they think defendants are selling?  Trademarks?  Unsurprisingly, here we also have evidence-free judicial factfinding about consumer perceptions of Warhol—a hallmark, no pun intended, of transformativeness cases. Also, if you can plausibly explain to me why Andy Warhol is not “simply” copying the soup cans but defendants here might be, in a way that doesn’t rely on Andy Warhol’s own (partially soup-generated) fame, I will knit you a sweater from very nice wool. Warhol famously (like honey badger itself) didn’t care, and much critical reaction at the time thought he was making nonsense; the canvases sold badly.  Query what would happen if Richard Prince invested in defendants today.]

Next, the court treats the trademark owner as an “artist” even though it is beyond peradventure that the trademark laws are not about creativity: “[I]t cannot be that defendants can simply copy a trademark into their greeting cards without adding their own artistic expression or elements and claim the same First Amendment protection as the original artist. That would turn trademark law on its head.” [This would only be true if you assume that all trademarks are “artwork” and ignore “source-indicating use” as a meaningful limitation on trademark protection—the latter of which, in fairness, is the modern US trend, even if it shouldn’t be because it creates problems like this one.  The court’s counterfactual reminds me of Justice Breyer’s example in the Wal-Mart oral argument of a hairbrush shaped like a grape: although I can imagine a card that just said “Coca-Cola” on the front and nothing on the inside, I can’t really imagine who would bother to make it or who would buy it, so I don’t know why assuming that such a card would infringe helps us answer the question of whether a greeting card that does more than that could infringe.  Would that even be a greeting card?]

For purposes of summary judgment, “defendants may have merely appropriated the goodwill inhering in Gordon’s mark without adding any creativity of their own.”  [Query: if there is testimony that the greeting cards as a whole are copyrightable despite using a stock phrase, should that satisfy the inquiry?  If not, why not?  What other standard for “creativity” do we have?]  It was true that the uses weren’t non sequiturs and made sense in context [presumably contra Parks], but there was a triable issue of fact “whether defendants added their own artistic expression, as opposed to just copying Gordon’s artistic expression.”

And then the court notes that Gordon presented evidence that he sold products bearing the mark, including greeting cards (and that defendants declined a licensing deal with him and defendants’ president testified [unconvincingly] that he couldn’t recall what inspired the cards).  With the placement of this discussion, the court seems to be grasping towards some sort of creativity-substitution standard—did they fill the same market niche, satisfying the same demand for expression?—but this isn’t a copyright infringement case.  A short phrase like HBDC isn’t copyrightable.  In fact, as framed, the court has just put copyright preclusion squarely on the table: if the question is whether there was copying of expression, that sure sounds like a right equivalent to copyright protection.

Anyway, “a jury could possibly conclude that defendants used the phrases for artistic reasons on one or more cards but not on others.”  This wasn’t like other prior cases, the court said.  In Rogers, “[t]he film did not appropriate Ginger’s mark; it came in praise of her craft, celebrating Rogers and Astaire’s ‘elegance and class’ and contrasting it with the ‘gaudiness and banality of contemporary television.’” [Which is to say it appropriated more of her image than just her name, which is apparently ok.] The film’s title was “not a disguised advertisement for the sale of goods or services or a collateral commercial product.” [Also true of these cards, which are themselves the expressive product being sold.]

The junior users in the Barbie cases “also viewed Barbie as a cultural icon, even if they did not treat her with the same adulation that Fellini did Rogers.” [And honey badger isn’t a mini cultural icon?] In the Empire case, “Empire” has a bunch of common, relevant meanings. And in the video game cases, “the borrowed mark was part of a much larger context,” [which notably didn’t translate into a finding of transformativeness in the portrayal of the players themselves as applied to the right of publicity claim,] which was also true of the GTA/Pig Pen case.  Thus, the court contrasted “the junior user’s own artistic expression” with “use in the same way that Gordon was using it—to make humorous greeting cards in which the bottom line is ‘Honey Badger don’t care.’”  [Which again conflates the expressive content of a work with a trademark for a work—assuming Gordon had a valid mark, it was valid as an identifier of the source of goods or services, not as the content of a work. “Honey Badger don’t care” might be capable of being used as a trademark for some things, though it’s a pretty long one.  Gordon has no trademark rights over the “bottom line” of an expressive work—that’s what copyright is for, except copyright doesn’t cover short phrases.]

“A jury could find that defendants’ cards are only intelligible to readers familiar with Gordon’s video and deliberately trade on the goodwill associated with his brand.”  [Here we have another way of making the fundamental mistake: the “brand” if any, and the catchphrase are fully distinguishable, just as the Statue of Liberty is famous but not famous as a mark even though there are entities using it as a trademark such as Liberty Mutual.  I would be stunned if there were noticeable secondary meaning here in the sense of consumers being familiar with the honey badger phrases as an indicator of source for stuff in the way that Hallmark is an indicator of source for greeting cards.  The defendants might thus easily have been relying on the cultural meaning of the phrase without free riding on Gordon’s “goodwill” in any trademarks.  This can be true even when there is substantial secondary meaning, as when I say “this is a Mickey Mouse operation”—unintelligible to those who don’t know the icon, but also protected by the First Amendment when it’s, say, in a restaurant review.

Another way to get at this issue: I doubt anyone would contend that Barbie Girl is “intelligible” to listeners unfamiliar with Mattel’s Barbie, or Fred and Ginger to viewers unfamiliar with Astaire and Rogers; at the very least, just as with the greeting cards, those works would lose a lot of their resonance without their cultural contexts.  Rogers, until now, allowed speakers to invoke a well-known, or not well-known, entity without equating that invocation to use of goodwill in a trademark sense. Indeed, the court’s blithe equation here of familiarity with trademark meaning is exactly what Rogers rejected.]

Anyhow, a jury must decide whether defendants used the phrases “in any way that distinguishes their use from Gordon’s and thus … ‘imbued’ their product with any ‘expressive value’ apart from that contained in Gordon’s trademarked phrase.”  [Note that this formulation is not the same as what the court apparently thinks is the real test, the repeated question of whether defendants added “their own artistic expression or elements.”  Suppose the jury finds that artistry is in the beautiful portrayal of the honey badger. Does that count?  This is basically the same question as I asked above about copyrightability.  (1) If artistry in honey badger rendition is insufficient because the question is instead whether the parties’ ideas were the same (they were using both using the phrases for greeting card punchlines), then we have Dastar problems times a million.  (Imagine what happens in a few years when somebody makes a Steamboat Willie cartoon—not a parody, just another standard Steamboat Willie cartoon—how will we determine what “distinguishes” that from an authorized Disney Steamboat Willie cartoon for purposes of this new, improved Rogers test?)  (2) If instead the question is whether the parties’ expression was the same, then we only have copyright redux (and summary judgment for defendants should be warranted, unless there’s something the court isn’t saying). (3) More likely the court is just thinking “there’s not enough” without giving any useful guidance on what “enough” might be, or why more than “more than zero” ought to be required.]

But hey, the defendants might win on artistic relevance, or on likely confusion or on abandonment.


tell me no lyes: hair relaxer claims continue


In re Amla Litigation, --- F.Supp.3d ----, 2018 WL 3629226, No. 16-cv-6593 (S.D.N.Y. Jul. 31, 2018)

Plaintiffs brought fifteen claims, including false advertising, against L’Oreal based on alleged defects in the Amla Legend Rejuvenating Ritual Relaxer, which is used to chemically straighten naturally curly hair. The court previously certified a NY class and a Florida class, but now decertified the unjust enrichment classes and classes seeking injunctive and declaratory relief, granting summary judgment to L’Oreal on those claims, and also granted summary judgment on all dangerousness-related claims based on the relaxer component of the product and on the California plaintiffs’ omission-based fraud and negligent misrepresentation claims. Summary judgment was denied as to the NYGBL claims and all remaining claims based on dangerousness or representations or warranties regarding Amla’s ability to protect scalps or implicit misrepresentations that the product is safer than relaxers that contain lye.

Hair relaxers generally use an alkaline agent “to penetrate the hair’s outer layer and permanently break the disulfide bonds in the hair’s keratin proteins, forming new, substantially weaker bonds.” The hair becomes straighter but more fragile—that is, damaged. This can cause hair breakage and scalp burning, as relaxer users know. L’Oreal’s expert survey determined that, after adjusting for the control, 80.2% of respondents believed that no-lye hair relaxers such as Amla can irritate the scalp and 63.5% knew that it could cause hair to fall out. “Users’ baseline expectation, then, is that the product here at issue, like all hair relaxers, poses risks. The alleged difference must be one of degree.”

Amla’s relaxer component contains proprietary “pro-solvent ingredients,” allowing the alkaline agent to penetrate the hair faster than they otherwise would. Plaintiffs alleged that these ingredients, together with the design of the emulsifier in the relaxer cream, caused the product to finish relaxing hair in less time than users could reasonably apply and remove it. But the alkaline agent continues breaking disulfide bonds until it is removed or neutralized; thus, the relaxer would necessarily break more bonds than necessary to relax the hair, thus allegedly making the product unreasonably dangerous. The court found plaintiffs’ expert report on the dangerousness of the relaxer component unreliable and inadmissible, and their other evidence of dangerousness insufficient.

Plaintiffs also argued that Amla was unreasonably dangerous and representations to the contrary were false and misleading because the scalp protector in the Amla kit does not “protect[ ] scalp & skin,” as represented on the product’s packaging. Their expert report tested the scalp protector versus petroleum jelly five times and each time found that the relaxer penetrated the scalp protector after a few minutes, while petroleum jelly lasted 30 minutes. This was admissible evidence, and the court noted that users might not complain about an unreasonably dangerous flaw in the scalp protector, given that users already know that the relaxer can burn if it touches the scalp (and thus presumably might blame themselves for user error in applying the scalp protector, without understanding that it had failed them). Thus, there was a genuine dispute over scalp protection, including whether representations and warranties about scalp protection were misleading or were breached.

Other alleged misrepresentations were based on the statements/warranties that Amla was a “no-lye,” “anti-breakage” and “intense conditioning” “rejuvenating ritual” that is “infused with” a “powerful antioxidant rich in vitamins in minerals” and which “delivers unified results,” has “superior respect of hair fiber integrity,” “reveal[s] visibly fuller, silkier hair”, “protects scalp & skin” and “infuses hydration & conditioning.” The court found that, the scalp protector aside, these were literally true claims as applied to the individual kit components to which they were directed.

However, plaintiffs also argued that these representations, and other package elements, misleadingly communicated greater safety than other relaxers, and though the product wasn’t unreasonably more dangerous than other relaxers, “the evidence strongly suggests that the product is not safer,” creating a genuine dispute on that issue. But was there a dispute over whether such a claim was made? The issue is how a normal consumer understands “no-lye,” a technically accurate description of L’Oreal’s lithium hydroxide product (lye is sodium hydroxide).

Separate from the litigation, L’Oreal conducted a study among 406 African American women, from 18 to 49 years old, who had used hair relaxers in the past six months. In that study, 57% of respondents said that the phrase “no-lye” communicated to them “that the product contained no/fewer chemicals” than other relaxers, and 39% said it communicated that the product “will not be harmful to the hair.” 27% of respondents pointed to the lack of lye as the principal reason they would like to use the relaxer. Another L’Oreal study found that “women are drawn to trying Amla relaxer anticipating that an oil-based/no lye relaxer ... will be more soothing and protective of a sensitive scalp than relaxers they’ve used previously.”

Plaintiffs offered their own survey of a similar population, which L’Oreal moved to exclude. That survey found that 80% of respondents answered that they would expect a relaxer whose package makes the “No-Lye” representation to be “less harsh on your hair,” 77.5% would expect that it is “more safe to use,” and 77.9% that it is “less likely to be harmful to your scalp and hair.” L’Oreal argued that the questions were leading in that they forced respondents to specifically consider safety, which they might not just seeing the package. There was no control group. “Comparable flaws have rightfully served as the basis for exclusion of similar surveys in other areas.” However, there was significant external evidence that relaxer consumers already associate lye with dangerousness and no-lye relaxers with comparative safety, as discussed above. “The risk that respondents only considered this possibility because of the listed responses is therefore relatively low, making the survey results more reliable.” Thus, the survey was admissible, and there was a genuine dispute over whether the package “meaningfully communicates to users that it is safer or gentler than relaxers that do contain lye.”

Unjust enrichment: plaintiffs’ only damages theory was that the product was so dangerous as to be worthless, justifying a full refund. They didn’t have evidence of damages based on the value of the scalp protector, and that didn’t render the entire kit so dangerous as to be worthless; the other parts performed their intended functions. [Query whether any reasonable consumer would buy a kit with a worthless but really important component.] Thus those claims, and their class, went away.

By contrast, NYGBL § 349 provides for the greater of actual damages or $50 statutory damages for anyone injured by a violation of its terms. “Because the statutory damages apply on a classwide basis, there is no need to determine the exact amount of [any] price premium.” A reasonable juror could find that adding the scalp protector increased the price of the product. The package advertised the scalp protector as one of its five steps and recommended its use in the section of the packaging labeled “READ BEFORE PURCHASING.” Also, 85.4% of respondents in plaintiffs’ survey, all of whom had used relaxers, indicated that a scalp protector should always be applied before using no-lye hair relaxers.

L’Oreal argued that some class members likely would have purchased the product even in the absence of those allegedly misleading representations. “This argument, however, is an attempt to impose a reliance requirement where none exists. As the New York Court of Appeals has recognized in this context, ‘[r]eliance and causation are twin concepts, but they are not identical.’… If there is a price premium, then every purchaser of the kit paid more than they otherwise would have, so every purchaser was injured. A purchaser’s individual experience after purchasing the product or idiosyncratic ex ante valuation does not matter.”

Since plaintiffs didn’t show a likelihood of repurchasing the product, their declaratory/injunctive relief claims were dismissed.

Fraud/negligent misrepresentation by omission: New York, Florida, Illinois, and Missouri define a manufacturer’s duty in varying ways, but the upshot is that “a manufacturer that knows its product presents an unexpected safety risk when put to its normal use has a duty to disclose that fact to consumers who do not have access to that information.” In California, a duty to disclose only arises if there is a direct “transaction” between a manufacturer and end-consumer and negligent omission claims are otherwise barred, so the California claims were kicked out.


claim that bulb lasts "up to" 25 times longer isn't puffery


Young v. Cree, Inc., 2018 WL 3659305, No. 17-cv-06252-YGR (N.D. Cal. Aug. 2, 2018)

Young alleged that Cree engaged in an “unfair and deceptive practice of ... promising consumers” that Cree’s light-emitting-diode bulbs “will last for particularly long periods of time up to 35,000 hours” with a “100% Satisfaction Guarantee” and “yearly energy cost savings ranging from around $0.60 to $2 per blub per year,” bringing the usual California claims. He alleged that, “[w]ithin months, all three [LED bulbs he bought] burned out even though [plaintiff] used them according to the instructions.” He allegedly relied on the packaging’s 10-year warranty and 10-year “100% Satisfaction Guarantee,” estimated lifetime, and estimated yearly energy cost savings, and paid a premium as a result.

Cree argued that none of its statements were false or misleading because (1) the statement regarding energy savings, as shown on the relevant packaging, contains an asterisk, which calls attention to disclosure of assumptions; (2) the statements regarding 100% satisfaction and performance as compared to other-less-expensive LED Bulbs and non-LED Bulbs couldn’t be found on the relevant packaging; and (3) the warranty was a promise to repair, replace, or refund, not a guarantee that the product will last ten years. Whether the statements were on the specific packaging Young bought, whether they would have deceived a reasonable consumer, and what reasonable consumers would have interpreted the warranty to mean were factual questions inappropriate for a motion to dismiss.

Young also challenged two internet/TV ads claiming that Cree’s LED Bulb would last “up to 25 times longer” than an incandescent bulb; and that the LED Bulb would use “a fraction of the energy of incandescent bulbs.” Cree argued that “up to” rendered first statement puffery, especially where Cree disclosed elsewhere on the product packaging exactly how long the LED Bulb was expected to last. Cree also argued that “fraction of the energy” was true because it was selling an 18-watt bulb designed to replace a 100-watt bulb. First, “up to” doesn’t automatically mean puffery. The statement at issue “relies on numerical figures with a set meaning and defines the relationship between them....” Second, whether the energy statement could have deceived a reasonable consumer was a question of fact, and Cree didn’t show that in fact the bulb was designed to replace a 100-watt bulb.

Tuesday, August 07, 2018

ad for a "true story" states an opinion, not a fact, when applied to an expressive work


Incarcerated Entertainment, LLC v. CNBC LLC, No. 18-480, 2018 WL 3677918 (D. Del. Aug., 2, 2018)

Ads for TV shows aren’t immune from false advertising law.  However, “[s]ummarizing an argument or opinion offered within the show is different than a statement made about a show as a product such as its length, characters or producers.” An ad representing a show as the “true story” of disputed historical events was commercial speech subject to the Lanham Act, but as long as the ad summarizes a theory actually expressed in the show, there’s no Lanham Act violation.

As alleged: 18-year-old Efraim Diveroli owned a defense contracting business, AEY, and in 2007 beat out more established contractors like Northrop Grumman and Lockheed Martin to fulfill a $298M weapons and munitions contract to arm the Afghan army/police.  Later, Diveroli pled guilty to conspiracy after a federal fraud indictment; he served a 48-month sentence. While incarcerated, Diveroli wrote a memoir entitled “Once a Gun Runner ...” and assigned the copyright to Incarcerated Entertainment, which also owned rights to photographs of Diveroli, dating back to his early childhood, and to Diveroli’s life story.

In 2016, Warner Bros. released War Dogs, which was promoted as being based on Diveroli’s life story. In 2017, CNBC broadcasted an episode of American Greed entitled “The Real ‘War Dogs’ ” [contrasting with the film] which similarly focused on Diveroli’s experience as a government contractor. CNBC promoted American Greed as a “shocking true crime series [that] examines the dark side of the American dream” and “tak[ing] you deep inside shocking true stories of brazen con artists who thrive on stealing fortunes, ruining and even taking lives.” An ad for the episode contained a video clip from an interview included in the episode with a comment that Diveroli got rich selling “bad ammunition while people the same age as him are taking the sacrifices. Despicable.”

The court here resolved false advertising claims.  CNBC argued that the ad accurately represented the American Greed episode and therefore didn’t include an actionable false statement. Diveroli argued that he didn’t sell “bad ammunition” to the US, and that people seeking his true story were likely to watch American Greed instead of buying his memoir.  Incarcerated conceded that “based on a true story” would be non-actionable, but argued that the affirmative representation of presenting the true story fell within the Lanham Act’s prohibition.

CNBC first argued that the “true stories” statement wasn’t commercial speech, and that the ads should get the same constitutional protection as the underlying work. The court disagreed. The promo was an ad, as defendants called it in their briefing; it referred to a specific product for economic purposes. “Capturing the potential viewers’ attention and capitalizing on the popularity of the film War Dogs, the advertisement attempted to attract viewers to CNBC for economic gain” by telling them they’d get the true story. 

Incarcerated’s claim failed at the next step: it failed to plead a false or misleading statement of fact.  Advertising statements made to summarize an argument or opinion within an expressive work are opinion, while statements about the work as a product (e.g., who’s performing in it) are statements of fact.  Incarcerated’s claim related to the former: a summary of the episode’s argumentative content. The court declined to let Incarcerated relitigate the fraud and conspiracy allegations of more than a decade ago in a Lanham Act trial.

"designed for increased safety" and similar statements aren't puffery on a motion to dismiss


Universal Electric Corp. v. Baldwin, No. 17-cv-00842, 2018 WL 3707423 (W.D. Pa. Aug. 3, 2018)

UEC “designs and manufactures products for the electrical power distribution industry” and “services the data center, retail, health care, higher education, and industrial markets across the United States,” including the Starline Track Busway and the Starline Plug-In Raceway product lines. The Starline Track Busway includes the T5 Series and plug-in unit options, such as the Starline Tap-Off Box.  UEC and BTI (of which defendant Baldwin was president) allegedly had an exclusive sales agreement for BTI’s territory including an agreement to hold UEC’s confidential business information in confidence and a noncompete.  Then the parties ended their distribution agreement and entered into a settlement prohibiting them from making “disparaging or negative comments regarding the other party...to any person or entity.”

Baldwin allegedly campaigned to impugn the safety of UEC products. For example, PDU Cables announced that it would be the exclusive distributor of BTI’s Busway Solutions tap-off boxes, a “safer and superior tap-off box to the standard OEM6 plug-in’s offered for ‘U’ shaped open channel track busway, like S[TARLINE]’s T5 Series Busway Track System.” The announcement said that its boxes “are designed for increased safety, superior performance, and easier installation.” UEC argued that, because Busway was the only non-UEC manufacturer that made tap-off boxes that were compatible with the T5 Series, the message was that Busway’s tap-off box was a safer alternative to the Starline tap-off box.  Defendants also allegedly made other false and disparaging representations about the relative safety of the parties’ products.

Defendants argued that the challenged statements were puffery, not fact. The court disagreed, at the motion to dismiss stage.  Specificity is the key to the fact/puffery line, and many of the statements made explicit references to specific design features and drew implicit comparisons to/implicitly criticized the sole competitor, e.g, “[t]ap-off box masts have always been a common culprit in busway track system failures,” “[i]f the head is misaligned, it isn’t uncommon to snap off the head during rotation,” and “when older style-tap-off boxes fail it is typically because of the electrical mast,” coupled with the claim that “[t]he Busway Solutions product improvement redesign resolved...these manufacturing weaknesses resulting in a tap-off box that delivers a more robust, safe and secure fault free load delivery.” These were not only specific, but also objectively verifiable and comparatively measurable.

UEC also sufficiently pled likely injury given that it alleged that every sale of a Busway tap-off box would likely have been a UEC sale in the absence of the false advertising.

False designation of origin: This was based on an ad stating that Busway offered a “two-year warranty on both the tap-off box and the section of Starline T5 busbar it is plugged into,” allegedly misrepresenting that Busway was an approved alternative source of Starline products.  The court found this implausible. There was no allegation of any attempt on defendants’ part to substitute their names for UEC’s with respect to Starline. “[T]he mere fact that one party offers to warrant, repair, or replace another’s product[, alone,] is not sufficient as a matter of law to establish a claim of false designation of origin.”

Trade disparagement: This requires (1) falsity; (2) the publisher either intends the publication to cause pecuniary loss or reasonably should recognize that publication will result in pecuniary loss; (3) pecuniary loss does in fact result; and (4) the publisher either knows that the statement is false or acts in reckless disregard of its truth or falsity. “The defining hallmark of a trade disparagement claim is the requirement that a plaintiff plead pecuniary loss with considerable specificity.” Specifically, without specific named lost customers, the plaintiff must allege “facts showing an established business, the amount of sales for a substantial period preceding publication, and amount of sales subsequent to the publication, facts showing that such loss in sales were the natural and probable result of such publication, and facts showing the plaintiff could not allege the names of particular customers who withdrew or withheld their custom.”  The complaint didn’t satisfy those requirements. Even allegations that two customers initially placed purchase orders for Busway, believing them to be Starline products, were insufficient in that UEC effectively conceded that they ultimately bought Starline.

Lanham Act covers ads that drug is FDA-approved/has ANDA


Arbor Pharmaceuticals, LLC v. ANI Pharmaceuticals, Inc., 2018 WL 3677923, No. 17-4910 (D. Minn. Aug. 2, 2018)

Arbor sells prescription erythromycin ethylsuccinate for oral suspension, allegedly the only FDA-approved products of their kind on the market. ANI announced the launch of its own erythromycin ethylsuccinate for oral suspension, allegedly claiming to be a generic version of Arbor’s products and falsely claiming FDA approval/AB-rating pursuant to an approved Abbreviated New Drug Application (ANDA). A product similar to an NDA-approved drug may be approved and marketed based on an ANDA, which requires a showing of therapeutic equivalence; the resulting AB-rating communicates that the product is a true generic.

Arbor alleged that ANI acquired an ANDA from another pharmaceutical company for a discontinued product that had been manufactured using a process that differs from that used by ANI, and that the FDA has notified ANI that its application wasn’t approvable. ANI stated that the relevant ANDA was originally approved in 1978 for Barr Pharmaceuticals, that Barr stopped marketing the approved product in 2003, and that the ANDA was discontinued. ANI said that it filed a supplement to the ANDA with the FDA, detailing changes it made to the manufacturing process, and indicated its intent to market the product if the FDA did not advise otherwise within 30 days. The FDA allegedly didn’t object, so it must know and be ok with it.  [Nice work if you can get it.]

ANI argued that Arbor’s claims were precluded under the FDCA. Despite Pom, courts have continued to find preclusion where a plaintiff’s claims would require a court to interpret and apply the FDCA.  This wasn’t such a case.  Arbor asserted competitive injury and sought to enforce the Lanham Act’s prohibition on false advertising, here false representations of FDA approval.  ANI stated that it owned an ANDA that couldn’t be circumvented by Arbor’s pleadings, and that the FDA tacitly approved of ANI’s actions, but those were just statements in a brief, whereas Arbor alleged that the FDA considered the ANDA discontinued and had so notified ANI.  Also, the FDA has a list of approved generics, and ANI’s product isn’t on the latest printing.  Because the allegations were that ANI falsely promoted its product as a generic equivalent, no interpretation of the FDCA was required.

For the same reason, the primary jurisdiction doctrine didn’t justify declining to decide the case.  Likewise, state and common-law claims weren’t preempted, though the unfair competition claim under Minnesota law was dismissed as merely duplicative of the false advertising claim.

Keyword ad buys are fine for less expensive products too, court confirms


Lasoff v. Amazon.com, Inc., 2018 WL 3720029, --- Fed.Appx. ----, 2018 WL 3720029, No. 17-35173 (9th Cir. Aug. 6, 2018)

Lasoff sued Amazon and appealed the grant of summary judgment on his trademark infringement and false advertising claims.  He argued that Amazon infringed Lasoff’s trademark Ingrass by buying it for keyword ads.  “Amazon is permitted to use a trademarked search term to direct consumers to competing products, as long as the search results are clearly labeled.” There was no evidence of lack of clear labeling.  Lasoff argued that MTM was distinguishable because consumers are more discerning as to watches than as to artificial turf, the product here. The court disagreed, making clear that noises about sophistication with respect to the underlying product have always been makeweight; the real issue is sophistication about search.  “The question is whether consumers are confused by the search results, and those results display the trademarked product names. The display of names in a set of search results is not made more or less confusing simply because the underlying products might be watches or turf.”